No More Fear and Loathing of CRE Lending for Banks via CoStar Group

As economic headwinds subside, the commercial real estate lending business for U.S. banks has hit an inflection point. For the first time in five years, a majority of banks are finally talking about their ability to grow their loan portfolios.

While the sentiment among banks is neither unanimous, nor the projected lending growth strong, bank executives in analyst earnings calls over the past couple of weeks were clearly signaling they believe they are on the other side of writedowns and are ready to return to CRE lending.

As bankers see it, they have worked through most of the troubles tied to real estate over the last few years, and now view that segment as one that represents a great amount of potential for earning's growth.

"We're beginning to see opportunity in the marketplace in select markets, and in particular asset classes," said William H. Rogers, Jr., president and CEO SunTrust Banks Inc. "We transitioned this business back into production mode, and we believe there is good future potential here. As with our other non-housing related exposures, our commercial-oriented real estate businesses have also performed relatively well through the cycle."

The question of how much growth there is in commercial real estate is one Regions Financial Corp. executives said they revisit each month.

Read more...No More Fear and Loathing of CRE Lending for Banks via CoStar Group